“Nothing in the area of finances has so dominated or influenced the direction of our society in the last few decades as much as debt. It’s amazing when you consider credit cards have only played an influential role in American life since the 1980s. It was once unusual to finance a car purchase, and mortgages used be mostly for G.I.s who were getting their starter homes.” – Larry Burkett (Debt Free Living)
I’m currently reading (listening to) Debt Free Living: Eliminating Debt in the New Economy by Larry Burkett (affiliate links: Book | Audio). The title tells you what it’s about, but I wanted to share with you, some insights from one of the chapters that really made me say… “ooohhhh! That explains so much!”
I often listen to books on my commute, and I’ll admit that this one (the narrator) is not that captivating, but the content is great. The first half of the book are a handful of scenarios of young folks and how they stumble into financial trouble, and later how they manage to dig their way out. There’s certainly bits of every story that are relatable, and the rest are helpful in understanding how easy it is to head down the wrong financial road early in life, like many of us have.
I want to share a history lesson with you from one of the chapters of the book because I think it provides some eye-opening context for the debt problem that is plaguing America at this time. Many people have been affected by the most recent recession (2008 ish) and while I’m usually more of a forward thinker, the past can give us some great lessons as we try to build our futures. Let’s dig in…
Interlude 1: Quick history lesson
There are many types of loans and extensions of credit that have become the “norm” in America over the past 80 or so years. The availability of credit hasn’t always been this prevalent. Here are a handful of types of loans that have become popular in the last century.
- credit cards
- car loans
- 30 year mortgage
- consolidation loans
- finance company loans
- parental loans
- student loans
The author then asks this question: How did our culture change so quickly?
And in a sentence… the cycle of debt and credit changed everything…